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Green Energy, Technology andInnovation Summit: New Avenue

for Greener Buildings &Construction Industry

By Dennis Tan

MBAM Council Member and MBAM Environment and QualityCommittee Chairmanon behalf of

Dato Ng Kee Leen, MBAM President

GREEN ENERGY, TECHNOLOGY & INNOVATIONSUMMITKLCC CONVENTION CENTRE

15th

June 201 0 1

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OverviewConstruction Growth Over the Years

New Avenue for Greener Buildings &Construction Industry

Conclusion

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Construction Industry Growth

Malaysia is fortunate that there is a revival in the industryin terms of growth.

The construction sector is improving in performance withGDP contribution of 1.1%, 4.5% and 7.9% and 9.2% inthe first quarter, second quarter third and forth quarter of 2009 respectively as a result of Government¶s effort inrolling out a succession of projects under the variousstimulus packages launched by the Government.

1st Quarter 2010 construction growth is 8.5%

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S ustainable Construction Growth

S ource: BNM Yearly Reports 4

-20

-15

-10

-5

0

5

10

15

20

Real GDP

ManufacturingS ervices

Agriculture

Mining

Construction

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S ustainable Construction Growth

S ource: BNM Yearly Reports 5

Year 2002 2003 2004 2005 2006 2007 2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010

Real GDP 4.1 5.3 7.1 5.2 5.9 6.3 4.6 -6.2 -3.9 -1.2 -1.7 10.1

Manufacturing 4 8.2 8.8 5.1 7.8 3.1 1.3 -17.6 -14.5 -8.6 -0.3 16.9

Services 4.1 4.1 6.7 6.5 6.4 9.6 7.3 -0.1 1.6 3.4 2.6 8.5

Agriculture 3 5.5 5 2.5 6.4 2.2 3.8 -4.3 0.3 -0.5 0.4 6.8

Mining 3.7 4.8 4.1 -0.8 -0.9 4.2 -0.8 -5.2 -3.6 -3.5 -3.8 5.2

Construction 2.3 1.9 -1.9 -1.6 -0.5 5.5 2.1 0.6 4.5 7.9 5.7 8.5

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One of the greatest contributors to globalwarming and other forms of environmentaldestruction is the building industry .

W orldwide buildings account for: -33-38 % - carbon emission30-40 % - world s energy consumption40-50 % - raw materials

68% - total electricity consumption12% - water consumption

Source: The W orld Green Building Council & EPA 2004

THE BUILDING INDUSTRY (GLOBAL)

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The overall green building market (bothnon -residential and residential) is likely tomore than double from today s $36-49billion USD to $96-140 billion USD by 2013(Source: McGraw Hill Construction ( 2009 ). Green Outlook 2009 : Trends DrivingChange .)

The value of green building construction isprojected to increase to $60 USD billion by2010(Source: McGraw -Hill Construction ( 2008 ). Key Trends in the European and U .S.

Construction Marketplace: Smart Market Report .)

GREEN BUILDING BY NUMBERS (GLOBAL)

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Use sustainable materials and products toreduce the depletion of natural resources andincrease the reusability of such materials and

products for the same or similar purpose .

Adopt sustainable construction methods toprotect the ecology, reduce generation of wasteand prevent adverse impact to the environment .

SUSTAINABLE CONSTRUCTION BY DEFINITION

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1. To intensify green -awareness activity and toencourage the practice of environmentally -friendlylifestyle, the Government had allocated RM 20 mil .

Among other efforts, is an international exhibitionon green technology that will be organised in 2010.

2. The Government will also give priority toenvironmental -friendly products and services thatcomply with green - technology standards ingovernment procurement of goods and services .

GREEN INCENTIVES IN MALAYSIA

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3. Apart from such broad -based initiatives, the Governmenthas come around to back the Green Building Index (GBI) byMalaysian Institute of Architects and the Association of Certified Engineers Malaysia in a two - tier strategy .

4. First, building owners or developers obtaining the GBIcertification between Oct 24 , 2009 and Dec 31 , 2014 will begiven income tax exemption equivalent to the additionalcapital expenditure in obtaining the certificate . It is known inthe industry that greening the building can add up to 20% ontop of the usual construction cost .

GREEN INCENTIVES IN MALAYSIA (cont.)

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5. The second tier in the strategy is for stamp dutyexemption on the instrument of transfer of ownership forfirst purchasers of buildings with GBI certificate from

developers between Oct 24 , 2009 and Dec 31 , 2014. Theexemption amount is reported to be equivalent to theadditional cost in obtaining the GBI certificate . These twotiers, tax and stamp duty incentive to promote the

development of green buildings will certainly pushdevelopers to seriously consider green buildingtechnology .

GREEN INCENTIVES IN MALAYSIA (cont.)

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Consumption of natural resourcesConstruction wasteLand contamination

Air pollutionW ater pollutionNoise and vibrationSoil erosion and siltation

ENVIRONMENTAL ISSUES IN CONSTRUCTION (M SIA)

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Establish a commitment statementBe mindful of environmental impact fromconstruction activities

Optimize use of natural resourcesPursue greater use of recycled materialsAdopt sustainable construction methodsAs part of organization s corporate responsibility

CORPORATE SUSTAINABLE POLICY

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Establish a corporate sustainable policyComply with applicable legal requirementsAdopt sustainable construction methods

Implement an Environmental Management SystemPractice 3 R: Reduce, Reuse and RecycleEstablish green indicators (waste generation, air,water & noise pollution, electricity consumption, etc)

Measure green performanceIndustrialized Building System (IB S )

INITIATIVES FOR SUSTAINABLE CONSTRUCTION

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Establish W aste Management Plan3 R: Reduce, Reuse & RecycleSorting and segregationS torage binsEngage recycling and disposal ContractorsRecycling facilitiesApproved landfills

GOOD WASTE MANAGEMENT PRACTICES

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Source and gather information of materials andProductsDriving goals minimize shipping cost, reduce fuel

consumption, environmental pollution, promotelocally manufactured materials and regionalmaterialsMeet material location radius requirements

(manufacturing location, local or regional sourced)Build a database

SUSTAINABLE MATERIALS & PRODUCTS

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H ow New Avenue for Greener Buildings &

Construction Industry?

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The launch of the National Green Technology Policy on 24 th July 2009 last year byour beloved Prime Minister reflects the Government¶s eagerness to act as a catalystfor the development of green technology in Malaysia. Through the implementationof this policy, the Government plans for greater promotion of Foreign DirectInvestments (FDI) in green technology to foster Domestic Direct Investments (DDIs)

and local industry participation. The government also hopes to make Malaysia aregional hub for green technologies.

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New Avenue for Greener Buildings & Construction Industry

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S ome of the challenges the Malaysian constructionindustry is facing where building green is concernedare:

The lack of knowledge because incorporating energy efficiency measures at designstage requires knowledge of the green building concepts. There is now a need for more skilled and knowledgeable professionals who have deep understanding of architecture and energy systems

The availability and affordability of materials / equipment which will contribute toenergy efficiency. We have tremendous potential for materials & equipment like heatresistive paints, insulation materials, building management systems, lightingcontrols and etc. The business opportunity for these products and technologies willbe immense only if there are financially and technically capable manufacturers of the said product.

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There are builders or building owners who may not be interested. Often the onepaying the bill and the one capturing the benefits differ. A developer may not beinterested in paying for green features when the benefits will be passed on to thenew owners or tenants unless, of course, he is able recoup the additional cost of

green features in the sale price or project income realized. This problem isparticularly evident for new homes and condominiums and for non-owner- occupiedexisting commercial buildings where, because of high turnover rates, owners maywant short payback periods on energy-saving investments.

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Contractor plays very important role in Green Building. These areas include:

CONSTRUCTION WASTE REDUCTION AND RECYCLING

If we take construction as a process, the basic inputs are materials, labor andmachinery, and energy. The outputs are the completed buildings and constructionwaste. This is one major area where Contractors can save the environment and at

the same time save their resources.Construction waste dumped into solid waste dumpsites typically constitute about40% of the total waste.

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S tudies by Yost and Lund have shown that roughly 80% of home building wastestreams can be recycled. The key to waste reduction is to adopt a Reduce-Reuse-

Recycle approach to materials. Many contractors have found that establishing acomprehensive plan prior to starting construction or demolition enables them to becost competitive, offering lower bids because of lower wastage costs and potentialincome from materials recovery and reuse. The following key elements must betaken into consideration in any plan.

Estimation of materials quantities

Identification of potentially recyclable materials

Estimate of cost impact of recycling

Identification of on-site storage and separation requirements

Identification of transport modes and destinations

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Material wastage can be classified into 6 broad categories, as follows:-

Conversion WastageWhen cutting small timber scantlings from baulks of timber as logs

Cutting WastageWhen sheet materials have to be cut for a specific component e.g. ply-woods, block-

boards, plasterboards, felts

Application WasteOccurs with most wet building materials such as plaster and other finishes

Stockpile WasteWhen lose material are dispersed on the site e.g. aggregates, sand

Residue Waste

Occurs when paints, glues, etc which are never completely used.

Transit WasteOccurs with brittle materials which break in transit e.g. slates and tiles.

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2. SELECTION & SOURCING OF MATERIALS

Judicious selection and sourcing of materials are of the key skill sets of S uccessfulContractors. Among the key elements of a Green Building are the selection and use of ³sustainable´, ³eco-labeled´ or ³green materials´. This is where ³Regional Materials´ are thepreferred materials over materials which have a high transport cost and therefore high energycost embedded.

Purchasing managers need to plan and document carefully their material sources. Anadditional criteria that purchasing managers have to consider when selecting materials for ³Green Buildings´ is emission of ³Volatile Organic Compounds´ from building materials. Takefor example paints. It is quite common to see people take as few days away from their homesduring re-painting works.

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Most paints contain high levels of VOC ± Volatile Organic compounds ± that expel a gas thatmay be bad for your health. A number of the better known paint manufacturers today however are responding by marketing low VOC or odourless paints.

Paints and other finish coatings and adhesives usually contain solvents to improveperformance, durability and applicability. Clean-up liquids also contain similar solvents. Thereis however an increasing awareness among the public that these VOC solvents pose apossible health risk. The more responsible manufacturers have therefore come out with high-

quality, latex-based coatings and adhesives for a wide variety of uses. Latex paints use water as their solvent and carrier, allowing both easier clean up and generally lower toxicity than oilbased paints.

Today, latex paints are equal or better in quality and durability than conventional oil basedcoatings. Many stains and clear finishes for floors and cabinets are also commonly available.Paints can only claim to be low VOC when they release less than ordinary paints.

Internationally accepted standards often quote 50 grams per liter of VOC for interior paints and100 grams per liter of VOC for exterior paints ± excluding water.

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Q UALITY OF CONSTRUCTION AND LESS RE-WORK

What are the factors that affect quality of Construction? The following key contributors towardsquality of construction:

DESIGN 50%CONSTRUCTION 40%(Workmanship)MATERIALS 10%(Product Failure)

Incomplete and un-coordinated documentation was identified as the key element behindDesign faults, incomplete and insufficient drawings

Insufficient and unclear details and drawings. Insufficient dimensions. H ave to scale off Plans. Plans, sections and elevations are not coordinated and lack of coordination between

drawings from different consultants and different elements of the designThe contribution of poor quality construction towards re-works and the attendant higher

construction cost and more wastage of materials and labor can only be resolved byattending to the main issues as follows throughout the design and construction process.

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4 . METHOD OF CONSTRUCTION AND ADOPTION OF IBS

The many benefits of implementing IB S ± Industrialized Building S ystems - are welldocumented elsewhere and is one of the major drives towards modernization of theMalaysian Construction Industry.

H owever there is still low adoption of IB S due mainly to lack of knowledge among contractorsabout how to implementing IB S in a beneficial way to improve productivity, lower costand reduce the environmental impact of construction.

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CONTRACTOR ¶S ROLE IN DESIGN PROCESS: CONVENTIONAL APPROACHTO BUILDING DESIGN AND CONSTRUCTION

The conventional procurement method usually begins with the developer client¶s selectionand/or purchase of the site. H e then engages the consultants to design, obtain building planapproval and prepare tender documents. Tenders are called and this is the first time theprospective contractors see the design and drawings. After the evaluation process, thedeveloper enters into a contract with the successful tenderer who now becomes thecontractor.

In the conventional approach, the contractor is being introduced to the project when he isinvited to tender for the project. H is contribution is to understand the intent of each GBI ratingcriteria applied for and implement the construction of the building according to the criteria setout. The contractor role here is to maintain high construction standards so that theenvironmental performance building is not compromised, careful selection of materials,sustainable site management, good recordkeeping and tracking of the project in terms of

accurate as-built drawings and site records for GBI S tage 3 verification assessment.

H owever, a truly green agenda calls for a H olistic design approach by all relevant parties.Contractors should no longer sit back and wait until the construction stage. Contractors cangive a greater impact by being involved from the beginning.

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HOLISTIC APPROACH TO BUILDING DESIGN AND CONSTRUCTION

In the holistic approach, the contractor is involved from Day 1 and is an integral part of theproject team. The Building Owner determines the project goals in terms of Green BuildingRating tool to adopt, targeted rating and budget for the project team to focus on. The projectteam will need to strike a balance between µcompany¶s green policy¶, value engineering, lifecycle cost, etc and write these into the contract conditions, drawings and documents and sothat this is not seen as an added cost during construction.

The contractor¶s contribution can be in terms of cost feedback, construction options, andmaterial options. Although higher ratings in general incur higher investments, not all points areequal in terms of construction costs. The holistic approach produces value based designs andprovides the possibility of building higher performing buildings with lower cost impacts.

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CONTRACTORS ROLE IN THE GBI ASSESSMENT

What has the GBI assessment to do with contractors? PLENTY!

Contractors have a significant role to play assisting the Building Owner obtain the GBIcertification. For example, in the Non Residential New Construction (NRNC) rating tool thecontractor plays a primary decision making role in at least 39 GBI points and a secondary rolein another 37 points where he contributes in terms of providing as-built information to theconsultants for their calculations and submittals.

In S tage 2 of the GBI Assessment process, the building has not been constructed and aprovisional rating is given based on the Design drawings and documents. This provisionalrating is subject to final review in S tage 3 which requires the submission of as-built informationas verifications that the building has been constructed to meet the targeted criteria as outlinedin the S tage 2 Design submittal. The Contractor and his team of subcontractors and suppliersneed to work together to follow the construction drawings closely as any deviations may causethe Building Owner to lose GBI points.

The Contractor also has the responsibility to keep proper records as evidence that thetargeted criteria have been properly implemented. Again, failure to keep proper documentationmay cause the building owner to get a lower rating or even worse, not be certified.

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THANK YOU

MASTER BUILDERS ASSOCIATION MALAYSIA

2-1 (1ST

FLOOR), JALAN 2/109E, DESA BUSINESS PARKTAMAN DESA, OFF JALAN KLANG LAMA58100 KUALA LUMPUR, MALAYSIA

MASTER BUILDERS ASSOCIATION MALAYSIA

dennis tan

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